Effects of Dislocation of Exports

It appears from the account in part III that these hopes were not frustrated, but, on the contrary, were very nearly fulfilled through the British crisis of 1810-11. Also it appears equally clear that this crisis cannot be regarded wholly, or even mainly (though certainly in part), as a fruit of the blows of the Continental System against Great Britain; nor was the extent of its effects at all what Napoleon had imagined.

On the whole, we have no reason to regard the economic effect of purely dislocation phenomena as particularly important. It is possible in this connexion that we are too much impressed by the unique experiences of the recent war in this direction; but even if we think of crises occurring during otherwise normal times—even crises of such an incalculable character as the cotton famine in England during the American Civil War—it is striking how soon their traces are swept away by subsequent development. The whole of Napoleon's plan on this point, made out at short sight as it was, cannot be regarded as having had any great prospect of attaining its object, that is, the crippling of Great Britain's military power by undermining the foundations of her economic life.

This, then, holds good of the purely economic effects of the dislocation; with regard to its social and political effects the matter assumes quite a different aspect. Here the political economist can really neither contest nor confirm the process of thought, for the result depends almost exclusively on the character of the people in question. An impulsive race, which has also become accustomed to receiving help from the state in all things great and small, may be led by a mere trifle to overthrow a government, a constitution, perhaps a whole order of society, while another people, which is more phlegmatic and less trained to rely on the state, may leave the conduct of the state entirely undisturbed even in times of serious distress and great difficulties. It is quite obvious that Englishmen, especially during the time of the Napoleonic wars, belonged to the latter category; and as Miss Cunningham has justly observed, the rage of the unemployed was directed in the "Luddite riots" against the new machinery (frame-breaking), but not really against the government. One can easily imagine that Napoleon, with his experience of the continual coups d'état during the French Revolution, could not see this; but this makes no difference with respect to the fact that he made a thorough miscalculation.

But to all this must be added the fact—and this is a very important fact—that the particular kind of dislocation in Great Britain due to the Continental System which was most favourable to Napoleon, was necessarily of a comparatively superficial nature, just because it was a dislocation caused by obstacles in the way of exports and not of obstacles in the way of imports. A failure of exports can always be alleviated by production with a view to accumulating stocks—supported, if necessary, by public funds; but that is not the case with the failure of imports, for if irreplaceable commodities are irretrievably left outside no measures can be of any avail.

Napoleon's thoughts certainly did not run in that direction, and the explanation lies in an attitude we have already learned to know, and which he shared not only with all his countrymen, but also, probably, with the majority of Englishmen. But even with due allowance for this, the position he took up was very peculiar; for what England would have needed to do was pretty much what he himself did at that very time. His own remedy for unemployment, in fact, was state support in different forms, in order to enable manufacturers to continue operations; and there is no reason to suppose that he ever ceased to believe in the efficacy of this remedy. In that case it would not have been a great flight of imagination to expect the same capacity on the part of his adversaries, whose fertility of resource and endurance he was not wont to deny.

In reality, it is true, these remedies were employed in Great Britain only to a very limited extent, owing to the fact that the principle of laissez-faire had already obtained a great influence over the classes that held political power in England. But we may certainly assume that Napoleon was not so familiar with his enemies or their economic views that he took such a factor into account. The British measures were limited to an issue of treasury bills for £6,000,000 for the support of embarrassed business men, chiefly manufacturers, the intention being to tide them over the time of waiting until the assets locked up in South America or elsewhere could be released. The proposal on this subject, based on a precedent of 1793, had been brought forward by a committee of the House of Commons in March 1811, but was not very enthusiastically received in any quarter. None the less the plan was carried out, because no one really wished to be responsible for throwing obstacles in the way of anything that might possibly be helpful in an unusually ticklish situation.

The arguments brought against the plan, especially by the economic authorities of the opposition, such as Huskisson, were especially that the crisis had been brought on by an excess of credit, which in its turn was connected with the excessive issue of notes by the Bank of England, and that these new loans would merely augment the speculation, the issue of notes and the rise of prices. To what extent this diagnosis was correct is a question that does not pertain to our present subject. We need only observe that if obstacles in the way of sale arise that are really caused by blockade and not by excessive speculation, then the transition to that form of production which in such a situation would be the right one can be rendered easier by a granting of credit that permits of a limited production for stock during the period of transition. Further, if this granting of credit is effected by genuine saving, that is to say, by a diminution of the demand for credit for other purposes—a thing which the banks can bring about by raising the rate of discount—then there do not arise the consequences alleged by Huskisson and by those who shared his views. This implies that the dislocation at which Napoleon aimed by placing obstacles in the way of British exports could have been overcome without insuperable difficulties. As things were, one may say that, on the whole, the dislocation was overcome by itself, without any measure at all worth mentioning; and it is not impossible that this was the best way out of the difficulty.

The impenetrable conviction as to the harm of all kinds of state interference found unmixed expression when it was a question of the sufferings of the workmen. With reference to petitions from the cotton operatives in Lancashire and Scotland, the House of Commons appointed, at the beginning of June 1811, a committee, which made its report after eight days. In that report it was stated, in the first place, 'that no interference of the legislature with the freedom of trade or with the perfect liberty of every individual to dispose of his time and of his labour, in the way and on the terms which he may judge most conducive to his own interest, can take place without violating general principles of the first importance to the prosperity and happiness of the community'—this as a reply to the petitions of the workmen for a regulation of the actual conditions of labour. In the second place, it was laid down that help in the form of money 'would be utterly inefficacious as to every good purpose, and most objectionable in all points of view', and after this there was no alternative left. Nevertheless, it would be a misjudgment of the leading men of the time if we should choose to see in their position mainly indifference as to the welfare of the workers, who, on the contrary, had indisputably sincere spokesmen in both the House of Commons and in the committee in question, especially the great cotton manufacturer, Sir Robert Peel, the father of the statesman. The fact of the matter is, as far as one can judge, that they sincerely regarded any kind of relief to the workers as harmful—although, in striking contrast, relief in the form of loans was finally granted to the manufacturers—because it was calculated to raise hopes which could not be fulfilled and to bind the workers firmly to an industry which could not give them employment. One speaker in the House of Commons particularly emphasized the necessity of the transfer of labour to agriculture, with the object of making the country independent of the import of foodstuffs. This was precisely a demand for the reorganization of economic life with a view to increased self-sufficiency. But the very fact that the working classes of Great Britain acquiesced with comparative patience in their tremendously heavy sufferings, even in the presence of so uncompromising a rejection, shows how limited the possibilities in reality were of putting an end to British power of resistance by any social movements caused by economic dislocations. This will be particularly clear if we compare the attitude of the holders of political power at that time with the concessions that had to be made to the demands of the workmen during the recent war in order not to endanger their good-will toward a continuance of the struggle.